Am I a Good Candidate for a Debt Settlement Program?

While a debt settlement program can be very enticing for individuals interested in significantly lowering their debt, it is not for everyone. Here is a list of some of the primary characteristics that make you a great candidate for a debt settlement program.

1. You have a hardship.

A hardship is a valid reason to explain why you have so much debt and can not pay. Reasons include medical problems for you or your family, loss of job or income, sudden emergencies, deaths in the family, divorce, etc. It is important that the explanation be legitimate because the hardship is one of the most important aspects of negotiating a debt. If a creditor does not believe in your hardship, then they are not likely to be willing to settle the account.

2. You have a source of income or funds.

It does not matter how well a settlement company is able to negotiate your account if you do not have money to pay the settlement. On average, a debt settlement company can personalize a debt settlement plan that requires you to save about 1.5% of your total debt. This ensures that you will be debt free in about 36 months. Others may come into the program with a lump sum or are able to borrow money from a friend or relative. The important thing is that you are honest about what you can afford to save.

3. You do not have any recent credit activity that might be considered strange.

Credit companies pay attention to big purchases just before consumers enter into a settlement program. For example, if you buy a 60 inch Plasma TV and the very next month enter into a debt settlement program, you are most likely not a good candidate. Credit companies flag these purchases and often view them as abuses.

4. You have a strong commitment to becoming debt free.

The biggest danger of entering a debt settlement program is not finishing. Many individuals enter the program enthusiastic and motivated, but after 6 months, they stop saving or prioritize something else and do not finish the program. This is very dangerous because creditors can become very aggressive if you drop out of a debt settlement program because they feel that they were misled.

If you join a 3 year program, you must be committed for the entire 3 years. This is the only way to be successful.

If you are considering hiring a Debt Settlement Company , I recommend speaking to debt settlement professional who can better orient you and provide you with more in-depth information regarding your personalized situation.

Scott Wallitsch is a certified IAPDA debt arbitrator for DebtorSolution. He provides Debt Settlement and Debt Negotiation advice to clients who are looking to become financially free and economically independent.

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